Business planning and consolidation bookshelf

June 28, at 4: But there are very good things with Questrade vs iTrade, Waterhouse etc. They will be charged with Questrade 0. Not a big supporter of Questrade but not a big fan of big-banks either worked for a US one and I witnessed first hand the waste that makes them charge commisions so high.

Business planning and consolidation bookshelf

Just about anyone who has responsible for the daily operations of a warehouse has either already experienced this situation probably many times over or likely will at some time in the future.

business planning and consolidation bookshelf

You're struggling with a lack of warehouse space and your cries for help are pretty much ignored by those with the power to do something about it. They upper management, the owner salien life forms, the usual "they" suspects simply don't believe you.

They've heard these complaints before and yet somehow you or someone else in your shoes managed to still get the job done. In addition, they may have occasionally walked down into the warehouse and observed empty space, maybe some partially empty shelves or completely empty pallet locations.

So either you are way too needy, or they don't understand warehouse capacity. While I won't completely dismiss the former, I think the latter is the more likely problem here.

The problem is they are looking at "theoretical capacity" and you are dealing with "working capacity" also called "effective capacity", "practical capacity", "rated capacity". Theoretical capacity business planning and consolidation bookshelf easy to explain. It's the actual physical capacity of the space dedicated for storage.

So if you have a simple warehouse setup with 1, pallet locations all designed for 40" x 48" x 72" pallets, your theoretical capacity would be 1, full pallets or 80, cubic feet 80 cubic Ft.

I call this theoretical capacity because, for a variety of reasons related to your specific inventory and storage characteristics, you cannot actually use all of this capacity.

If you have a WMS and have all location cube and item cube information set up, you could run utilization reports that shows you how much of your theoretical capacity you are using.

And that's what brings us to working capacity. As I mentioned before it has to do with inventory characteristics and storage configurations.

Inventory characteristics include the number of items, the physical size of the items, how much you carry, and the characteristics of inbound and outbound orders.

And all of this works within the characteristics of your storage configurations. That's because in the selective-rack scenario, whenever you remove a pallet from a location, that pallet location is available for another item.

However, in the floor-stacked scenario—assuming you can't mix items or lots in storage lanes—you need to wait until that lane is completely emptied out before stocking something else in it.

And if we went back to the selective-rack scenario and changed the operation from pallet-pick to case-pick, our cube working capacity would be reduced because we would have many locations with partial pallets in them. How much would it be reduced? Again, that depends on the characteristics of the operation.

So now let's get back to explaining to management how even though the warehouse guys are whining about a lack of space, they still manage to get the job done.

This is where "working capacity" gets a little fuzzy. When we go back to the previous scenarios that showed lower working capacities, there is a point at which you will not be able to put away inbound receipts without doing some level of consolidation or relocation of existing inventory.

For example, in the floor-stocked pallet scenario you may have initially put a receipt in an 8-deep 3-high floor stocked pallet lane. As you use up that inventory, you could move the remaining inventory into smaller locations.

The more you are willing to do this, the higher your utilization will be.


If you're one of those folks that are fanatical about not doing any "non-value-added" activities, you probably don't want to do this at all, so you will need to accept that low utilization. Then again if your space costs are very high and your labor costs are very low, you may find that it makes sense to move that inventory from an 8-pallet deep lane to a 5-pallet deep lane, then to a 2-pallet deep lane, then maybe even eventually to selective pallet rack as the inventory depletes.

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business planning and consolidation bookshelf

Traditional planning, budgeting, and financial closing processes and tools are not up to the task, producing results that are often inaccurate and outdated.

Why I said good-bye to Questrade? | Canadian Capitalist